Jarred and Heather discussed how to make the energy transition work for all communities, finding opportunities, and overcoming the challenges.
At the VERGE conference in October 2021 Jarred Metoyer, DNV Senior Vice President of Energy Markets and Risk North America, presented an “Ask the Expert” talk with Heather Clancy, Editorial Director of GreenBiz that focused on the Equitable Energy Transition. In an information-packed half hour, Jarred and Heather discussed how to make the energy transition work for all communities, finding opportunities, and overcoming the challenges.
Inequities already exist
The first thing to know about energy equity is that we don’t yet have it. “When we talk about an equitable energy transition, it’s fundamental to that bigger picture, looking globally at this massive transformation of how we use energy and the decoupling of energy from gross domestic product,” he said. “When we talk about equity it becomes the end goal. But the energy transition and decarbonization is also an end state. Equity would be a desired end state—we’re not there yet. We’re far from equity.” Without intervention, the energy transition could widen energy inequality, which is caused by racial social and economic disparities.
“In order to define equity, you have to define inequity,” Jarred explained.
The first and foremost metric is energy burden, or what proportion of a household’s income is spent on energy bills. Lower-income households bear heavier energy burdens, paying up to three times as high a proportion of their income on energy than other customers. In addition, research by UC Berkeley’s Haas School of Business found that, nationally, Black families pay 20% more of their income in energy bills than non-Black families, across all income levels. In California, Black families pay almost double what non-Black families of the same income level pay.
“These are the fundamental inequities that we’re trying to address when we talk about an equitable energy transition,” said Jarred.
Workforce equity is key
One way that utilities can help fix the underlying economic inequities that drive energy inequity is through workforce equity efforts. While aiming for equity on the customer side is crucial, a major component of an equitable energy transition must also be the jobs created to carry it out. We need to address the systemic issues around income as well as the cost of energy everyone pays.
“Every report that’s out there shows the infrastructure needed—whether it’s the grid, whether it’s renewable generation, whether it’s energy efficiency,” said Jarred. “A massive workforce is needed to propel the energy transition. If you simply follow current statistics, it’s going to continue to be inequitable.
“By creating requirements, whether it’s for supplier diversity or for utilities and large companies themselves, or if it’s for new programs to foster minority- and woman-owned businesses, it’s back to that wealth question: Who’s getting the growing wealth from the energy transition? Who’s getting that early seed and development money and getting that career that’s going to lead to longer-term wealth, that’s going to affect some other systemic problems beyond just the energy transition?”
One example Jarred gave was DNV’s recently launched scholarship program, one of its community engagement initiatives. “There were these amazing diverse candidates who were all-stars. They’re going to go crush the world, and we all thought, ‘Can we just give them all the money? Because they can do this job better than us.’ At the same time, my colleague Margot [Roache-Green] brought forward what she called her ‘diamonds in the rough,’ who were folks that didn’t have 4.8 GPAs—which I didn’t know existed, but apparently, they do—and didn’t stand out and weren’t already getting all this recognition and praise. We’re able to help them out too.”
The second example Jarred gave was Kapor Capital’s Kapor Center, a foundation in Oakland that teaches coding and other STEM skills to disadvantaged students in the Bay Area to prepare them for careers in tech.
“I would like to see the same kind of thing for clean tech and for the energy transition,” said Jarred. “I’ll always borrow great ideas from great people, and I think the Kapor Capital Kapor Center model is a fabulous example.”
Jarred credits his interest in energy equity in part to his own experiences working in the energy industry. “I’m a Creole of color from Louisiana. I was in many engineering classes where no one looked like me, I’ve been to a lot of conferences where I was very dissimilar to my other colleagues,” he said. “It’s always been clear to me that the workforce wasn’t quite proportionate.”
“When I chose my career in the very beginning, it was either Department of Defense-type contract work, or go look at some attics and see if there’s insulation missing,” he said. “Making that early choice, I definitely was passionate about doing something that’s going to make a bigger impact. On the flip side, knowing that there are already inequities on the workforce side that then cascade out into these other systemic inequities that we see, down to everybody who pays an energy bill—which is, effectively, all of us—motivated me to focus on energy equity.”
Multiple stakeholders, multiple solutions
But customers and workers aren’t the only players in an equitable energy transition—investors, policymakers, regulators, and community groups all have roles to play.
Jarred highlighted community solar programs as pioneers in the equitable energy transition, noting that programs like BlocPower—a Brooklyn-based electrification startup—made use of a favorable policy environment, partnerships with large firms like Goldman Sachs, and relationships with community centers to attract investment into local heating and cooling projects in urban neighborhoods. “You can literally invest in your neighbors, which is powerful,” he said.
“Generally, I think availability [of community solar] is going to increase significantly,” he said. “I think that it comes down to the ability to put together the package and investments. Now that it’s been done more than once, we can go back to the people that have done it in their local community and bring it to other communities.”
While community solar is promising, there are no one-size-fits-all solutions. “It’s going to take multiple solutions to achieve the energy transition,” Jarred pointed out. Rural areas will need different solutions and different infrastructure than urban ones, for example. Some sectors, like heavy industry or airlines, will have to make use of carbon capture for combustion fuels. Other sectors, including most residential ones, can and should go right to electrification of heating, hot water, and cooking.
Public-private collaboration will also be a key factor in achieving the energy transition, which raises the importance of a multidirectional approach with a variety of benefits for each project. “If you’re trying to make things happen and you just look at it from a pure return-on-investment, cost-effective aspect, it doesn’t pencil out and people move on.” When one project has multiple benefits, however, it’s easier to attract multiple streams of investment.
“It takes pressure on many sides,” said Jarred. Policy and regulations are a key source of pressure, as are the investors themselves. Having a clear public policy path towards an equitable transition, plus investors that will provide pressure that way, will set the direction that the energy transition will take.
“There’s going to be a massive redistribution of investment,” he said. “How do you leverage that inflection point, to change it from where we are now—which is, there’s not equity—towards equity?”